The invention herein relates particularly to systems for drying compressed air employed in many manufacturing processes. The invention being characterized by the employment of heated exhaust heat from a compressor station for regenerating the desiccant in a pair of drying vessels which are alternately connected in an air drying step or in a regeneration step. The invention is characterized by the use of a cooler and a heater connected in a shunt circuit to dry the desiccant in the regenerating step and to cool the desiccant to make it more efficient for use when it is employed in the drying cycle.